Digital Bootcamp Asia Podcast

The China Dream Goes Digital with Alex Duncan, Co-Founder of KAWO Technologies

August 05, 2020 Natasha Fang Season 1 Episode 4
Digital Bootcamp Asia Podcast
The China Dream Goes Digital with Alex Duncan, Co-Founder of KAWO Technologies
Chapters
Digital Bootcamp Asia Podcast
The China Dream Goes Digital with Alex Duncan, Co-Founder of KAWO Technologies
Aug 05, 2020 Season 1 Episode 4
Natasha Fang

Alex is a British entrepreneur who has lived in China for 14 years. He identified a gap in the market 7 years ago, and thus co-founded KAWO, one of the leading Marketing SaaS players in China.

KAWO helps major international brands like the NFL, Vera Wang, and Nike to plan, manage, and analyze their content across WeChat, Weibo, and Douyin, the three major social media channels in China.

Alex’s core skill set is UX design and programming but running KAWO for several years has given him a deep understanding of the Chinese social media landscape.

Connect with Alex Duncan on LinkedIn.

This show is powered by Digital Bootcamp Asia, sponsored by Tolmao Group. Natasha Fang is the Founder and CEO of Tolmao Group, a leading integrated marketing agency headquartered in Shanghai City, China. Recognized for original content, persuasive digital marketing strategies, interactive website designs, and influential event marketing campaigns, she has worked with a variety of clients. Connect with Natasha Fang on LinkedIn.

Facebook: https://www.facebook.com/DigitalBootcampAsia
LinkedIn: https://www.linkedin.com/company/dbasia
Instagram: https://www.instagram.com/digitalbootcampasia
Twitter: https://twitter.com/DB_Asia

Show Notes Transcript

Alex is a British entrepreneur who has lived in China for 14 years. He identified a gap in the market 7 years ago, and thus co-founded KAWO, one of the leading Marketing SaaS players in China.

KAWO helps major international brands like the NFL, Vera Wang, and Nike to plan, manage, and analyze their content across WeChat, Weibo, and Douyin, the three major social media channels in China.

Alex’s core skill set is UX design and programming but running KAWO for several years has given him a deep understanding of the Chinese social media landscape.

Connect with Alex Duncan on LinkedIn.

This show is powered by Digital Bootcamp Asia, sponsored by Tolmao Group. Natasha Fang is the Founder and CEO of Tolmao Group, a leading integrated marketing agency headquartered in Shanghai City, China. Recognized for original content, persuasive digital marketing strategies, interactive website designs, and influential event marketing campaigns, she has worked with a variety of clients. Connect with Natasha Fang on LinkedIn.

Facebook: https://www.facebook.com/DigitalBootcampAsia
LinkedIn: https://www.linkedin.com/company/dbasia
Instagram: https://www.instagram.com/digitalbootcampasia
Twitter: https://twitter.com/DB_Asia

Natasha Fang :

You're listening to Digital Bootcamp Asia Podcast, where entrepreneurs and business owners share their real-life stories and lessons learned on how to start, grow, and excel in their business in the digital era. This show is brought to you by Tolmao Group, an integrated marketing agency. I'm your host Natasha Fang. Alex is a British entrepreneur who has lived in China for 14 years. He identified a gap in the market 7 years ago, and thus co-founded KAWO, one of the leading Marketing SaaS players in China. Okay. Hi, Alex. Alex, welcome to the show. Please introduce yourself a little bit and tell us what you do.

Alex Duncan :

Hi, Natasha. It's a pleasure to be here. I'm Alex Duncan. I'm one of the co founders of KAWO and KAWO is a marketing software company based here in Shanghai. We have been going for about seven years and for anybody that understands the software industry overseas. We're basically just like Hootsuite for China. And if that doesn't mean anything to you, what our company does is we've built a platform that helps brands to manage WeChat, Weibo and Douyin more effectively. What we've seen in China in the last 10/15 years is this incredible economic growth. And the marketing industry has grown so much with the growth of these social media platforms. WeChat Weibo Douyin. Now this is the main way that brands are communicating with their customers. But at the same time, teams are still working in a very inefficient manner internally, a lot of time has been spent creating Excel spreadsheets and creating PPTs. And we're at a point where we need to improve our effectiveness on marketing. You know, every time we talk to teams, they say it's harder and harder to gain followers on WeChat. We talked to bosses and said They're having to spend more and more, and it doesn't feel like they're getting better and better results. They're also not sure where they're getting the right ROI. And so we created KAWO seven years ago with an agency who saw this problem, I think, further in the future. And so we set out to create a great piece of software that helps marketing teams, both in China and outside of China to manage their social media together in China in the best way possible, and to really understand their followers and to communicate their messages effectively. In terms of me, I'm originally from the UK. I moved to China in 2007. Straight out of university, I really didn't have much plan for my life. At that point. I had a job offer to go and work in consulting in London. And it just didn't seem like that exciting. I thought I want to go and have an adventure. And so I bought a plane ticket to Shanghai without speaking Mandarin,without knowing anything about China. And I just thought I would figure things out. And to be honest, nearly 14 years later, I still think I'm figuring things out. But for the last seven years, I've had this incredible experience building a software company. And yeah, hopefully we can share more about that today.

Natasha Fang :

That's impressive. So what is the main thing that you were witnessing China back then? Well, when you just arrived in Shanghai.

Alex Duncan :

Oh, my goodness. That's a tricky question. It was such a shock. I mean, it's probably worth realizing that I came from a little village in England. I lived for 17 years of my life in a village of 500 people in the countryside in England. I went to a very traditional University, which looked a little bit like Hogwarts for anybody that have seen Harry Potter, and we used to wear gowns and bow ties, and we're taught inside these huge buildings that were thousands of years old. And I then went almost straight from that ancient and traditional University and landed right in Shanghai, this city that was clearly changing as an incredible rate. And back then in Shanghai, I think foreigners were still quite this rare and unusual thing. A lot of people would stop and look at me on the street. And every time I was involved in situations, people seem to be very interested and curious and what I've seen over the last 14 years here in China, is that Shanghai has become this incredibly international and cosmopolitan city. Everything has grown at an incredible rate. When you and I both work in marketing, and we've seen now maybe 10 years ago, for every one job in marketing, there is now I don't know 500 or 1000 jobs in marketing. So we've seen this incredible growth and a lot of the time with that huge growth has has come huge challenges as well. And so it It's been a fascinating ride. And it's been awesome to be a part of that. And I feel like one of my opportunities here is that I get to bring some of my knowledge and my expertise from the west where I learned to be a designer. I taught myself to program and I get to share that with all of the awesome colleagues that I work with here and create value in this community and be part of building this industry in this incredibly exciting country.

Natasha Fang :

Wow. So in a fast pace and changing country, especially city, living in Shanghai, are you able to speak Chinese?

Alex Duncan :

Yes, I speak Chinese reasonably well, for I guess the average Shanghai foreigner, although I'm nothing compared to my Beijing friends. One of my favorite phrases that I learned a couple of years ago was that Apparently, Beijing makes the foreigners into Chinese people and Shanghai makes the Chinese people into foreigners. And this is definitely true. Shanghai is obviously a lot more cosmopolitan. And you don't really have to speak Chinese to survive in Shanghai. But I've been lucky to get myself involved in various businesses that needed me to speak Chinese. At one point, I decided I was going to try and design dresses for women in the UK. And that meant that I spent a huge amount of time in the fabric markets talking to tailors. I learned a lot about how to make clothing in Chinese. And to be honest, many of the words I learned I don't think I know the English equivalent of them today. I also have had the chance to travel a lot around China on my bike. And I think that's given me a huge appreciation for just the immense size and diversity of this country. You probably saw recently, we produced this report on the Chinese digital ecosystem. And one of the first sections of that report, we try to highlight the diversity of China. I think so many people think of it as one country. And I hear so many people making statements like, oh, Chinese people do X, Y, and Zed. But in my experience, China is more easily compared to an entire continent. You know what, there are many different groups and niches and different ways of thinking and people across the country. And so it's been traveling with my bike has been a great chance to see that, you know, we go to small villages in Fujian and up into the mountains in Qinghai, and next week, I will be up in the mountains and Sichuan. And you get to meet these people who are just on the edge of this economic revolution in their lives. Maybe only just starting to be touched by the incredible changes that are happening in this country, so there is still incredible potential ahead. You know, the middle class in China might already be at 31% 500 and 30 million people, but there is so much change to come ahead. And so yeah, that's that's one of the things that really excites me too.

Natasha Fang :

So being able to speak the language itself, you think it definitely help you to solve some challenges you have encountered living and running business in China.

Alex Duncan :

Yes, although I would say in my current role, I don't speak Mandarin. As much for business. I think the big shift I've seen, actually, in China, is that as China has had these incredible successes when it comes to building tech companies that really now lead the world, you know, in terms of innovation, we've got WeChat and mini programs and, you know, ByteDance is now showing the West how to build social media with Tiktok and Douyin and I think with that China has developed a certain confidence that it knows how to innovate, and it knows how to do things. And increasingly, these days, I feel like even if I was fluent in Chinese, I don't think that that would be quite enough, I think I would actually have to be Chinese to really fit in and feel at home in this ecosystem. And so I'm more focused on the ways that I can add value, the ways that I can act like a bridge between Western countries and Western marketing teams. You know, when it comes to my team, we have different parts of our team. We have Alex Lee, our CEO, who spends a lot of his time talking to the local customers, the local teams, talking to investors and building the relationships on this side, making sure we have the right access to the networks and the data we need and at the same time, I'm often on the calls when it comes to teams in Paris and Europe, helping to convince them that we are the right partner for them to have in China. So we've tried to take what is perhaps these days maybe considered as a disadvantage being a foreign company in inverted commas, and try to make it actually into an advantage. You know, we are able to be this link between both sides of the world. If you are one of our clients, if you're the Bundesliga, or the NFL or Balenciaga or somebody like that, you're able to work with us on both ends of the spectrum. We're able to connect with your local team and understand their needs. But we also are able to have good conversations with your team in Paris and help bring both sides together and bring a common understanding.

Natasha Fang :

So apart from having a diverse

Natasha Fang :

team, you know, With different cultural backgrounds to help you to understand how to navigate business, both locally and internationally, how do you keep up with the digital revolution in China?

Alex Duncan :

Wow, that's a tough question. Because there is an I don't know if this is the case in marketing globally, but one of the things I found the biggest challenge in China is that certainly in the marketing industry, there is always a search for a new trend. You know, the latest trends we've seen this year are the trend for private traffic, where people are now wanting to create WeChat groups and communities. And before that everything was about social CRM. And before that, we had trends like AR and VR. And, you know, last year everybody was wanting to be on Douyin. I sometimes take a step back and try to remember that, although there are these ways that are constantly improving the way we can connect with consumers. Marketing fundamentally hasn't really changed in 200 years. There's a great quote from a guy called john Wanamaker who used to invest in. He had a store, and he used to put adverts in magazines or newspapers back then. And he said, he had this quote where he said, I know that half of my marketing is working, and half of my marketing is not, but I just don't know which half. And in some ways, we're still in the same situation all these years later with the digital platforms, which supposedly have huge amounts of data and tracking. And ultimately, what works is what connects with your consumers. If you are able to understand your consumer and what they're going through, and what their motivations are, if you're trying to sell a product to parents, that helps them with their young children. What is the challenge a parent faces, you know, is it that they don't get to spend enough time with their child is it that they're Feeling over pressured at work is it that they're worried their child won't achieve the academic success to pass the GAOKAO get into the right schools. All of these things actually can be highly specific to China. And whether or not you do that communication through Douyin or WeChat, or Weibo, or you write to them, or you hold events, or whatever it is, fundamentally, everything should start with really understanding who that person is. And that's something we do ourselves as a software company. We're not just building a product which we can sell to the sales teams. We're sorry that our sales team can sell to the bosses of marketing teams. We really care about building a product that really works well. So the majority of the users of our products are people you'll be very familiar with their content executives, their account executives, they're the people that are creating content on a daily basis and they are scheduling it. They're communicating with clients. They're trying to get approval. And we think about those people a lot. How can we save them time in their day? How can we help them to find out what works? So, yeah, marketing really, for me, aside from all the trends, aside from all of the constant innovation, it always comes down to understanding your customer and speaking their language.

Natasha Fang :

Definitely. And I think also, technology is forward but humans are behind. So there are a lot of things can be done and tried various in China, so because of COVID-19 I see there are a lot of changes in the consumer behavior, how people interact with one another. Where do they go, what kind of food they consume. So do you think changed consumer behavior does impact on your business?

Alex Duncan :

Well, we've been incredibly lucky actually that our business has been relatively unaffected. I think there's a couple of reasons. One of the reasons is that digital communication channels, and specifically social media is more important than ever, for connecting with your consumers and your followers. And so a lot of brands are looking at it and saying, we need to be doing this really well. And so one of their opportunities to do it better is to work with a software company like us where everything can be more organized, especially if their teams are working in new ways where they're not necessarily in the office as much they're working remotely. So two parts there one, the changing nature of work has meant that people are looking more for software like ours. And then the fact that digital methods of communication is so important also helps us to, I think also as sad as it sounds to say, because we're now in this situation where a lot of marketing teams are cutting budgets. And we've heard from some agencies that they've lost some of their retainer clients. And it's hard to find new clients. But actually, the businesses that are looking to really beat the competition in this time are turning to solutions like ours, which allow them to say, look, we have a different advantage, we're going to work in a more efficient and more effective way, we're going to deliver a higher level of service to you. Because we're going to use software and smart tools and insights. We're going to be data driven. We're going to be more of a partner to you. And I think that's also helped us a lot. None of these trends have started with COVID. They all existed before that, but I think as we've probably heard a lot in the information cycle, that they've been accelerated by this there's suddenly this new pressure to be more digital more effective if your marketing budget has been frozen. or cut you now smaller, less people in your team. And you've got more competition out there fighting for the same pool of consumers. How can you make sure that your brand is the one that's actually winning in that situation? And as we said, being smarter, making sure you're speaking the language of your consumers. When we released this guide, a few weeks ago, I was very lucky to be asked to talk a lot and give lots of webinars. And a lot of the questions I received, were all about tactics. They were always about, should we be on Pinduoduo? Or what can we do to be successful on Xiaohongshu? How can we do this and that, and I almost always turn the question back round to the questioner and ask them, should you be on that platform? Is that the right place for you to be where your consumers are, you know, is this the place that's going to represent your brand is going to expose you to the right people and going to help you turn those people into potential customers.

Natasha Fang :

Yeah. So what are the main learning point this year by being able to physically, physically here in Shanghai and China is the first country being hit but also the first getting out of the lockdown.

Alex Duncan:

Yeah, I mean, I don't I feel like we're still in it. And it's hard to know what those lessons are. You know, we've seen so many countries deal with this situation situation in different ways. And we don't yet know which of those strategies will prove to be the most effective in the future. Obviously, we saw some of the European countries really hit very hard and then those other countries that Germany that seemed to manage us a lot better. But will these countries that had less early infections then go and have a bigger second wave? Obviously, we've seen the US potentially get almost everything wrong, and really, really suffer. And obviously, China has been incredibly controlled in making sure the virus didn't spread at all. But at the same time, it does mean that if it does come back at some point, there's a lot of us probably you and I sat here who are at risk and could capture the virus. So I don't know what we can learn on that front yet. But I think what we can see from what's happened in the changing nature of work is that before this idea of you had to be in an office and you had to be there from a certain time is really going away. I remember we used to try and get all of our team in to be, you know, here at 10 in the morning, but while we were working remotely with somebody stuck in Taiwan and I was stuck in Morocco, and other members were working from home, things like that just didn't seem as important. It was much more important as to what are the objectives of our business? And are we getting them done? Regardless of whether or not you're working six hours a day, eight hours a day sitting in a certain desk at a certain time? Are we supporting our customers, you know, having a conversation with them and continuing to do whatever we can during that period. And I hope that we take some of these learnings and continue to continue to keep them going in the future.

Natasha Fang :

So are you excited for the months and years to come for your business?

Alex Duncan :

I'm very excited. So we grew 300% in revenue last year. Wow. And we managed to reach back breakeven in December 2019, which, although we didn't know it at the time was the perfect thing to happen to us at that point, because it meant that we were ready to go through the potentially tough periods. We imagined that because Christmas and Chinese New Year were quite close together that nothing would happen in the first month of the year. But then we thought as soon as Chinese thing is over, everything is going to come speeding back. And obviously that wasn't the case, because as soon as Chinese New Year was over, and China started to relax a little bit, we started to see the West really start to struggle. And that's where we really were then in a situation where our problem had just shifted from one place to another where teams in China were not able to make decisions because teams in Europe were not available. So I am feeling very optimistic about the next couple of years. I think we've seen China's GDP growth has been hurt a bit by this because obviously people have been locked down like we've had less exports and Less things being produced less people buying things. Now, from what I understand is during these times this is when businesses start to look at, okay, we rushed in to spend all of this money on digital marketing, what are we actually getting for it? What is actually giving us the results. And it's also we've seen a couple of the bigger Chinese brands and Huawei being a particularly notable one who are now starting to focus more on branding. And obviously, in China in the past, we've seen a huge focus on short term conversion based marketing tactics, everything people do has to turn into a sale somewhere. Now with branding, that's obviously not the case, like branding is this longer term investment and how can you mark yourself out, and I believe it's one of the things that is creates the defense against a competition on price. You know, with our company, we've always tried to build a brand that really stands for something we've tried to always do high quality work when we produced a guy to WeChat articles when we did our data analysis last year, when we produced our ultimate guide to China's digital landscape this year, we invested heavily in that content, we gave it away completely for free. And just hoping that people would download it, get some news from it, and then realize that we were had some expertise in this field. And that when they were ready to talk to us, they will reach out to us because they're the name that we know. And so I'm hoping we're going to see more of an investment in brand in China in the coming week, weeks, months, years. And that should be great for both consumers because when brands start to think more about branded content and delivering messages, it's more about delivering value. It's more about making you like them, you know, when they create these ads and these fun campaigns, and it's less about just trying to get you Do something click on a button and buy. And so it should be good for consumers to.

Natasha Fang:

And we saw dedication in building the software to help brand reach that goal. How do you see yourself continuing contributing to help the brand to directly the value to the consumers through your platform, are you adding new features to your platform.

Alex Duncan :

Yeah, I mean, we try and add new features every single week, every single week. Yeah, so there's usually our platform gets updated about twice a week. Some of those will be small bug fixes. Sometimes it can be something as simple as a translation that just helps somebody to understand a feature of our product better. Like a simple feature. We've always had internal comments in our platform so that marketing teams can communicate with their clients or even internally using our comments. But in the early days, we were just calling them comments. Now people find it very confusing because they thought well does that leave a comment on the Weibo post? On WeChat post, so as soon as we turned it into private comment, it instantly was much clearer to the users. And it got used a lot more. So we're constantly trying to make our software more user friendly. And we're also constantly trying to guide our users towards the type of behavior that we see that delivers results. Last year, we did this data analysis. So we're lucky to have access to a huge amount of data. We had in this data analysis, we had 20 million data points related to half a million Weibo posts and 50,000 WeChat articles, and we try to organize them into patterns. So we came up with theories like we thought, maybe an article will, the day after an article is published, the account will lose or gain followers depending on the quality of the article. So we ran all the analysis and we found out that on a day that a brand Doesn't publish anything on WeChat, which is quite common because some of them can only publish four times a month. And even most subscription accounts don't use every single post that they have. So we found on the day and account stays silent, they would roughly gain maybe point a quarter of a percent of followers. On a day that a brand published the worst performing 50% of their content, they would generally lose more followers. So they'd lose maybe a quarter to half a percent of their followers. So it's only then once you get above their best, up to their best content, the top 5% of content brands publish on WeChat will gain them about 4% of their followers, new followers. And then if a brand publishes an incredible piece of content, I'm talking the top 2% of their articles. They can gain as much as nine to 10% followers. So In that situation, what we're helping accounts to do is to say, well, you're putting all of this effort into creating, you know, your content, half of which is worse than you never saying anything. And then you've got these few pieces that delivering you amazing results. How can we help you to identify what pieces of content are doing really well, and then show you those pieces of content. So then you can try to understand how can we do more of this good stuff, and less of the things that are actually not really helping our account. And so that's one of the battles we're always trying to do is because we have to do a lot of complex maths and equations and analysis in order to find these insights. But a lot of the teams that work in marketing organizations don't necessarily have those math skills. So a lot of what we're trying to do is to make it simple for them to understand the outcome and show them after this piece of content was published. You lost this many followers. These are the pieces of content that saw the biggest follow again afterwards. And so little things like that to help them benchmark. We're also trying to break down some of the insights we have in industry so that we can say, on average, every time somebody shares content from your account on two moments, you get 12 views of that content, whereas maybe for another account, they get five views or six views. And so we can say, perhaps you could try and create content that is gonna be more interesting for your followers to share or something like that.

Natasha Fang :

It is definitely fascinating to learn, like, using data able to observe the consumer behavior, how they respond to polls, that gives you the first row for you to observe the continuing changing consumer behavior in China. So, thank you so much, Alex, for joining us today at the show. No worries, please tell our listeners how they can find you online.

Alex Duncan :

So you can reach out to me Alex at K word comm is my email address. You can also find me on LinkedIn by searching for me if you just put Alex and Kayla in, you'll either find me or my other colleague, and you can reach out to us there. And you can visit our website ky.com KW Oh, and you can request a demo, learn more about our products. And you can even watch a YouTube video explaining how to say Okay, well

Natasha Fang :

thank you so much.

Alex Duncan :

Thanks very much Natasha and looking forward to the event next month.

Natasha Fang :

Thank you for listening to Digital Bootcamp Asia. Until next time!